Target Corp.’s
TGT 1.55%
chief is standing by the retailer’s physical stores even as the brick and mortar seems to be crumbling around him. Chief Executive
Brian Cornell
warned of a steep decline in profit this year, the WSJ’s Khadeeja Safdar reports, while calling this “a year of investment” that will commit Target to improving its stores, launching exclusive brands and developing supply chain and digital capabilities. The grim outlook following declining sales in the holiday quarter is a stark sign of the impact internet commerce is having on traditional retailers, and Target’s faltering approach shows how tough it’s been to turn around the big-box operators. Target isn’t closing stores like some retailers, but instead plans to use more of those outlets to fulfill online orders while it cuts its overall inventory. As other retailers have seen, however, using stores for both online and in-store fulfillment can bring a new set of costs, and headaches.

LG Electronics Inc.
says the need to move goods faster to American consumers is behind the South Korean company’s decision to build its first major factory in the U.S. The conglomerate is putting a washing machine plant in central Tennessee, the WSJ’s Andrew Tangel reports, in a move that could help LG’s push into the American home-appliance market. It also gives LG a new production outlet following a U.S. Commerce Department decision last year to impose tariffs on LG washers made in China. But LG insists its new site is built on the need to streamline its supply chain in a lucrative market, not battles over tariffs. LG executive William Cho says a U.S. factory will speed up deliveries to American customers, reduce shipping time and costs while helping the company to respond more quickly to market demands.

Flatbed trucking company
Daseke Inc.
has some new currency for its acquisition-fed growth strategy. The company has started trading on
Nasdaq,
WSJ Logistics Report’s Erica E. Phillips writes, through a merger with an investment company set up for the deal that values the company at about $700 million. Daseke is one of the biggest carriers in the $133 billion flatbed sector, but it’s a highly-fragmented wing of trucking the company believes is ripe for consolidation. Daseke says it will use $150 million from the new stock offering for more acquisitions to build on a buying spree that took it from $30 million in revenue in 2009 to $655 million last year. Daseke has targets in mind, but its bigger aim may be the $1 trillion in infrastructure spending being considered in Washington. With its bigger scale, Daseke may be heading into a fast lane for a share of that federal money.

SUPPLY CHAIN STRATEGIES

Big warehouses are going up at a blistering pace, but companies aren’t lining up quite as fast to fill them. A new report from real-estate broker Colliers International shows developers finished “big box” warehouses totaling nearly 25.5 million square feet combined in the last three months of 2016, a 77% increase from a year ago. But “net absorption”—the industry measure for real estate filled by clients—slipped back from a year ago and from the third quarter. It’s only one quarter, of course, and a typically slow time of year. But it signals a rare pause in a warehousing market that has seen developers scrambling to keep up with accelerating growth in demand in recent years. Market-watchers at Colliers and other firms say demand for distribution centers remains vibrant, and they note the online sales explosion that is fueling the warehousing surge isn’t slowing down at all.

Add the seafood business to the industries lining up against a possible border tax. Food businesses that rely on raw materials are among those most exposed to the border-adjustment provision tin the House Republicans’ tax plan, the WSJ’s Richard Rubin and Heather Haddon report. And unlike goods manufacturers, they can’t turn their supply chains inside out. They warn that the potential border adjustment tax could force them to raise prices and likely would take a big toll on revenues. The food industry depends heavily on imports: Imported seafood, for instance, makes up more than 80% of domestic consumption. Coffee, tea, spices, chocolate and bananas make up some of the world’s longest-standing supply chains—and can’t be produced in commercially viable quantities at home. Border-tax proponents are pressing ahead, but the potential impact at the dinner table suggests the effort will be a complicated battle that will reach deep into the business community.

QUOTABLE

‘We need to get faster and more reliable.’

—Target operating chief John Mulligan, on the retailer’s online fulfillment.

Number of the Day

7.3%

Growth in inventory of “big box” warehouses greater than 300,000 square feet in 2016 over 2015, according to Colliers International.